US company Tesla has its sights set on central Queensland for an energy project and, in a first for Australia, will provide long-term financial support.

Genex, the company behind the Bouldercombe battery project, says it also has contracts for Elon Musk's Tesla to supply a large, 50-megawatt battery and will use their algorithm-powered bidding system to sell power.

"We think this particular arrangement is unique in Australia; it's the first one and even possibly the first worldwide," Genex chief executive James Harding said.

"Tesla is very experienced in the Australian market.

"They have been providing their automated market bidding system, but this is the first time they have provided a long-term revenue support arrangement such as this, and sharing the revenue from the project.

"It shows their real confidence in the economics of this project."

The Bouldercombe battery project is located 23 kilometres south of Rockhampton.

Land has been secured for the project and the grid connection is underway.

Genex says the project will power 4,167 homes and offset 22,655 tonnes of carbon emissions annually.

How will the project work?

Genex says the project could be one of the first standalone large-scale battery energy storage systems in Queensland.

Mr Harding said the Tesla battery would be located inside the boundary fence at its Bouldercombe site, with 40 large receptacles, which look similar to shipping containers.

The battery will have two hours of power storage capacity.

"The battery will be able to charge itself from the network when prices on the electricity market are low. For example, when there's lots of solar generation during the day from rooftop solar," Mr Harding said.

"Then it will be able to generate for up to two hours in the peak times — in the evenings when people switch on their air conditioning.

"So, charging when the electricity prices are low and even sometimes where electricity prices go negative and then generating into the market when prices are high."

The Tesla megapack lithium-ion battery system will be fully assembled, tested and shipped from its factory in Nevada in the United States.

Mr Harding says Genex chose Bouldercombe for the site as it is a "strategic part of the network".

He noted it was ideally positioned, near several renewable energy generation sources and close to load centres in Gladstone and south to Brisbane.

The company expects the battery to be fully operational by 2023.